Luby’s third quarter results reported a year-over-year decline in financial numbers, leading to the extension of its shares’ declining trend.
Luby’s (NYSE:LUB) shares have been under pressure over the last five years due to unstable revenue growth and widening losses. Its stock price lost 12% of value in the last twelve months, and the stock is down 70% in the previous five years. Luby’s shares are currently trading around the lowest level in the last 52-weeks.
Luby’s is a U.S.-based multi-branded company who owns and operates restaurants.
Luby’s Third Quarter Results Fail to Impress Investors
The company has been struggling to generate positive growth in its financial numbers due to stiff competition. Its third-quarter revenue dipped 3% from the same period last year, while same-store sales dropped 1% year-over-year in Q3.
Revenue from all of its restaurant brands plunged since the previous period. Fuddruckers and Cheeseburger in Paradise were the biggest losers; revenue from both brands declined at a double-digit rate.
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Its loss from continuing operations widened to $14.1 million in the third quarter, as compared to a loss from continuing operations of $0.4 million in the previous year. Luby’s management is dissatisfied with its financial and operational performance. Chris Pappas, President and CEO, said, “We are disappointed with our third quarter financial results. We have now intensified focus on delivering superior service, excellent food quality, and variety at compelling values.”
Will New Business Help in Driving Growth?
Luby’s is under a significant debt burden. Its debt was standing around $44 million at the end of the latest quarter compared to cash-on-hand of $1.2 million.
The company announced a plan to restructure the entire business – which they believe would allow them to reduce debt, as well as narrow losses. It plans to generate $45 million of cash in the following quarters through the sale of low-performing restaurant properties. The company says they will use the proceeds to reduce its debt burden and invest in business growth opportunities.
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